AFG is marking a significant milestone this month, celebrating 20 years in business – and its director credits brokers with its success.
Founding directors Brett McKeon
, Malcolm Watkins
, Kevin Matthews
and the late Bradley McGougan began the business in an office in the Perth suburb of Subiaco so small the photocopier needed to be wheeled in and out each day so that they could sit down at their desks.
The nationwide financial services company now has 2000 brokers lodging around $4 billion in mortgage finance each month, accounting for 11.4% of the Australian residential mortgage market.
Its loan book is worth more than $90 billion.
AFG director Brett McKeon attributes the company’s success to broker development paying off.
“For the past 20 years, our core driver has been the profitable growth of our brokers’ business which in turn has driven our growth. It’s a simple strategy that’s worked, we’re now the largest mortgage broking group in Australia and one of the country’s leading financial services companies.
"Our broker business model was a first for Australia. Our hair may now be greyer than the suits we wore in the 90s, but our conviction remains the same – our success in business has come from our belief in the value proposition a broker can provide to their clients. And our future lies in helping our brokers to operate efficiently and profitably and to ensure they maximise the opportunities diversification can also bring to their businesses.”
Profits from broker efforts are re-invested back into the business, such as the $60 million spent developing the technology platforms and tools since the company began.
Declining competition in the mortgage market is a topic McKeon is passionate about.
“Australia’s population has grown by 25% since we began in 1994, but the number of lending partners has halved. We work hard to promote the importance of competition and commission structures and will continue to do so. Competition is key to a healthy lending market.”
A lot has changed in 20 years, said McKeon.
“We’ve grown bigger, the world is a lot faster, but one thing has never changed – our focus is on profitable business growth and diversification; our brokers’ and our own.”
McKeon said diversification of the business has been the key to its longevity.
AFG’s mortgage broking business is one arm of a financial services company which includes a growing property business with $300 million of projects underway, a securitisation arm with over $1 billion of business, and a bond issuer with a full treasury division which has issued over $800 million in bonds to global markets in the past 12 months.
The company has plans to expand its property trust management business in future.
'Ferocious' fight for the top
Mortgage figures significantly slump in April
Aggregator raises $300m in RMBS funding